IMPORTANT UPDATE (March 3, 2025): The U.S. Treasury Department has issued new guidance regarding the Corporate Transparency Act (CTA). Effective March 2, 2025, no penalties will be enforced for failing to meet the Beneficial Ownership Information (BOI) filing deadlines. Additionally, the Department has stated its intention to revise the CTA to apply specifically to foreign entities. As such, should you not file BOI reports by the March 21st deadline and there will be no penalties against you — which effectively means the Act is off...again.
---------------------
What happened: the Corporate Transparency Act (CTA) filing requirements were reinstated on February 18, 2025.
What it means: As such, your beneficial ownership (BOI) filings are due March 21, 2025. You can file your BOI reports here.
What is the Corporate Transparency Act (CTA)? The purpose of the act, enacted by Congress in January 2021, is to both prevent and combat money laundering, corruption, tax fraud, and terrorist financing. Corporations, limited liability companies, and other entities formed or registered to do business in the U.S. must adhere to the BOI reporting requirement the CTA established.
Where do the filings go? Reports are filed with Financial Crimes Enforcement Network (FinCEN). FinCEN lists the criteria that determines which companies will be required to report beneficial ownership information to them. There are 23 entities that are exempt from the beneficial ownership reporting requirement. Dealers and related dealer organizations have an entity exemption if 3 criteria, listed below, are met. There is also an exemption under the CTA for a wholly owned subsidiary of an exempt business.
Dealer and Related Dealer Organization Exemption:
- Employ more than 20 full-tome employees
- Operate at a physical U.S. office and
- File federal tax returns demonstrating more than $5 million in gross receipts or sales
If I have to file, what's the deadline? Companies qualifying under the Act are required to file a BOI report with FinCEN by March 21, 2025, and will be subject to penalties for failing to do so. This is especially important for those entities that do not have employees that meet the exemption or gross receipts, such as dealer real estate holding companies or dealer management companies.